For many years, a number of people have predicted that telecoms providers would become a key channel for SaaS providers, putting their wares in front of the small and mid-size businesses to whom they already provide telecoms and Internet access. It has always seemed like a no-brainer, but the telcos have singularly failed to make a reality of the vision — indeed, several failed spectacularly in the midst of the collective bust in 2001-03 that brought down dot-coms, telcos and ASPs (the forerunners of SaaS). Since then, few have dared to tangle with SaaS and their progress has been nothing to write home about.
UK telecoms giant BT, to its credit, has never given up on its longstanding quest to find the right formula to bring SaaS to the SMB masses, and it is now beginning to fill out a range of offerings that put SaaS into a practical context for its SMB customers in the UK.
I'm encouraged by this because it seems to me that telcos are ideally placed to aggregate services for SMBs. Unfortunately, however, most have failed to understand that they must do more than simply add SaaS to their price lists. Business applications and services are bought in a more interactive sales mode than commodity utilities like bandwidth, and SMBs want them packaged up into a ready-made solution rather than sold as tickbox components. Back in February, I speculated that SMBs might react more warmly to SaaS aggregators who have already shown that they themselves understand the online environment:
"The SaaS channel to SMBs, then will consist of companies that already offer business services to SMBs online. They'll be competent at using the Web for prospecting, selling, closing and after-sales support (all of which will help keep their costs low, which they'll need because of the lower price points and the subscription billing model). They'll also have to be good at aggregating and integrating a number of different services and products into an all-round solution."
Although BT has a much bigger offline than online presence, its SaaS pitch to SMBs is couched in the context of succeeding online, and therefore targets exactly those small enterprises who are keenest to exploit the potential of online working to cut costs and create new opportunities for themselves. This seems like a winning formula, if BT can deliver on it.
For example, last week, BT announced the fruits of a partnership with San Mateo-based Genius.com, whose email marketing solution lets sales agents track a customer in real-time as they browse a company's website in response to a marketing email. The service helps sales agents identify their most promising prospects and so BT has packaged it under the name BT Smart Marketing.
The new service fits well as an extension to the NetSuite and SugarCRM deals BT announced earlier this year. An even more rounded story starts to emerge when you put those offerings together with BT's earlier signing of electronic signature service EchoSign and its recent acquisition of IP telephony application services platform Ribbit, as BT's general manager of SaaS, Chris Lindsay, explained in a phone briefing earlier this week:
"What we're looking to do is to fill out solutions around CRM to provide an integrated suite as we move forwards — to allow you to optimize your end-to-end sales process."
Ribbit in particular will add a distinctive flavor to the package, extending applications with capabilities that have already proven popular with mobile users, such as instantly converting voice messages and memos to searchable text. "The Ribbit acquisition is a core part of our strategy moving forward and you'll see more and more of the applications that we offer being Ribbit-enabled," Lindsay confirmed.
Announcements from other vendors this week have also emphasized a trend towards packaging up services from several SaaS vendors. Jamcracker, who I've written about previously in this context, yesterday announced it has added Zoho's range of on-demand business applications to the portfolio of products it offers telcos as a packaged set of services they can make available to their customers. While on Tuesday, on-demand financials vendor Intacct announced a new program to certify complementary applications that integrate with its own, unveilling a charter list of partners that includes Adaptive Planning business analytics and reporting, Avalara sales tax management, QuickArrow professional services automation and SpringCM document management. These developments signal an important new step in the evolution of SaaS and bring a new slant to age-old debate between best-of-breed versus integrated suites.